Earlier today, we reported on claims in Sweden that criminal gangs are using fraudulent streams on Spotify to launder their ill-gotten gains.
However, Spotify’s response to the report by Swedish newspaper Svenska Dagbladet is punchy, to say the least.
“It is our belief that this story, full of anonymized sources, is largely a work of fiction. Manipulated and artificial streams are an industry-wide challenge that Spotify has been working hard to solve,” claimed Spotify in its official statement.
“Regarding the article by SVD, we cannot comment on far-fetched suggestions and hearsay, and Spotify is not aware of any contact by law enforcement about this,.”
(One of the key claims in the original article came from a police officer who said they’d contacted Spotify about the gangs’ operations, and had received no response.)
“Further, we have no evidence that our platform has been used for money laundering. The article references illicit money being converted into cryptocurrencies entirely outside of Spotify.,” continued Spotify’s statement.
“But on Spotify’s platform, we work to combat all artificial streaming regardless of motivation, and our automated detection processes and manual monitoring are industry-leading.”
“As we made clear before this story ran, less than one percent of all streams on Spotify have been determined to be artificial, and those are mitigated because streaming revenues are not paid out to rightsholders in real-time, as our systems regularly detect and eliminate anomalies before they reach a significant threshold.”
Fraudulent streams are a sensitive topic within the music industry at the moment. Earlier today, they were one of the key planks in a new deal struck between streaming service Deezer and the biggest major label, Universal Music Group.
That agreement saw Deezer promise to work on a “stricter, proprietary fraud detection system” while admitting that according to its existing detection system, around 7% of its streams in 2022 were “fraudulent”.
Spotify claims its comparable number is much lower, but Svenska Dagbladet’s story is already causing wider ripples in the music industry.
Today, for example, IMPF – the body representing independent music publishers – put out a statement in response.
“Reports that suggest streaming fraud is funnelling significant revenue towards the activities of organised crime are incredibly disturbing and increase pressure on streaming platforms to stamp out the practice as a matter of urgency,” it claimed.
“Fraudulent streams have been a growing problem for some time now, with the recent French Study (Centre National de Musique) estimating they could make up 3 % of all streams – a figure that represents only those streams which the services can actually detect.”
“Not only are independent publishers and legitimate music companies suffering financial damage as a result, but the suggestion that this issue is aiding and abetting violent criminals means it must become a critical priority for streaming services.”
Another industry body, Impel, put out its own statement today in response to the reports.
“Challenging as it is, we can’t turn away from our shared responsibility for tackling this issue. Organised crime has many victims and as an organisation dedicated to securing value for the song, we do not want to see songwriters and publishers included in that list,” said CEO Sarah Williams.
“At the moment, various industry players and groupings are looking for suspicious patterns in the data and trying to tackle the problems that they reveal. It’s very welcome but we must avoid an a hoc approach.”
“We need comprehensive, integrated initiatives that attack this multi-headed hydra from all angles. We also need transparency from and co-operation between DSPs.”